Personal Injury compensation and Divorce – how divorce can impact upon damages received

A number of news articles have reported that there is a possibility that Simon Vaughan, a soldier who was severely injured in Afghanistan, will face losing some of his £1.1m compensation in his divorce. The final financial hearing in this case started on 21st September 2015. The outcome of this decision will depend upon the details of the family’s situation (which the media has not reported on).

In 2008, Simon Vaughan received a £1.1million payout after an attack in Afghanistan left him severely brain damaged. Simon and his former wife Donna separated in 2013. Mrs Vaughan has issued financial proceedings so that the court can consider the parties’ finances as a whole to enable her to raise the two children of the family. The mixture of monies from the military and insurance payouts has now reduced from £1.1million to £250,000 and Mr Vaughan is concerned that he could face losing some of this in the financial proceedings as he needs such funds for his ongoing care costs.

This case raises the issue of how injury compensation is treated in family law and in relation to the interpretation of ‘needs’ in financial proceedings. Mr Vaughan’s representation is hopeful that the outcome of this case will identify and test these principles fully for the benefit of others who are in a similar position to Mr Vaughan.

When the court are considering the impact of divorce on a damages award, compensation is not ring-fenced and is brought into the balance sheet just like shares or savings. The court do however undertake a balancing exercise and consider factors such as the welfare of the children, their standard of living, or in Mr Vaughan’s case, his disability will be a relevant factor that needs to be taken into account when considering the parties’ respective ‘needs’.

For advice and guidance on how personal injury awards are treated in financial arrangements on separation, or to discuss your current situation, please contact our specialist Family Law lawyers on 0161 927 3118 for a free 20 minute consultation.